SMCP: the share price stumbles following a new warning

(CercleFinance.com) - SMCP, owner of the Sandro, Maje and Claudie Pierlot fashion brands, issued a new warning on Friday evening concerning its 2023 annual results, the second in less than four months.


The clothing group is now forecasting a weaker annual performance than previously announced, with fourth-quarter sales flat at constant exchange rates, in a macroeconomic context that has continued to deteriorate.

For 2023, sales are expected to come in at around 1.23 billion euros, representing constant-rate growth of +3.8% (instead of 'mid-single-digit' growth), with an adjusted EBIT margin of between 6.4% and 6.6% of sales (instead of 7% to 9%).

The company had revised its 2023 annual guidance downwards last September, due to the overall deterioration in market conditions.

"The continuing inflationary environment and a deterioration in consumer purchasing power have weighed heavily on the Group's commercial momentum", commented Oddo BHF analysts, who lowered their price target on the stock accordingly, from four to 3.5 euros, while maintaining a "neutral" opinion.

The year 2024 looks set to be a difficult one for SMCP", stresses the research firm, which points out that, despite an unfavorable economic cycle, the group is in a decent financial position, enabling it to get through this period of depressed consumption, and that it is still generating cash.

On the Paris Bourse, SMCP shares fell by over 6% after this new warning, bringing their decline since January 1 to over 25%.

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